Monday, September 20. 2010

It was a little less than a year ago that we broke the news that Google was working on a phone of its own – which was eventually revealed as the Nexus One. It was about that time, says out source, that Facebook first became concerned about the increasing power of the iPhone and Android platforms. And that awesome Facebook apps for those phones may not be enough to counter a long term competitive threat.

Specifically, Facebook wants to integrate deeply into the contacts list and other core functions of the phone. It can only do that if it controls the operating system.

We’ve been taking a beating today on our story about Facebook working on a branded mobile phone. Just like last year with the Google Phone, lots of people threw tantrums about how we made the story up right up until Google launched their own branded phone, the Nexus One.

And that’s what’s happening today, due in no small part to Facebook PR issuing what looks like a blanket denial of the story this morning. “The story is not accurate!”

Except the story is accurate. Facebook has been working with hardware manufacturers to explore building their own phone. We don’t know the timing, and we don’t know how deep the software stack is that Facebook is contemplating building, but we know that as of very recently the project was alive and well.

There is in fact a bit of a rush by various players to try and build their own walled gardens in the emerging mobile smartphone world, the belief being that if you can trap the consumer onto your device and deeply integrate with their address book etc then they won't get off your service. (And the worry being that Apple and Google will do it to you if you don't)

And on mobile people actually are used to paying money....

However, it reminds me of the early days of the online media world in the early 1990's, where just about every player with half a pretence of an interest in the emerging Internet market was looking at the end to end value chain they could own, if they could wall in enough customers.

It never came to pass, for 3 main reasons:

(i) No one player had the resources to put together a compelling enough offer across the value chain from content through to device to persuade people to lock themselves in

(ii) Users did not like the idea of being locked in to one service provider and acted against it, forcing interconnection (the same happened with SMS, the first mobile data service)

(iii) Technology moved on, allowing open access to be set up easily (HTML, Web Browsers etc).

In this arena they are also assuming that the mobile telcos will remain passive, yet they see all the data and have that most golden of gooses, the customer credit card (and a s a recent Pew survey noted, customers most want to pay for things via their mobile bill).

So, what to make of Faceboook's alleged attempt to buck the trend and bunker-hunt its users? The biggest issue it has is it doesn't own any end device marketing and delivery capability, and thus credibility. Google, despite all the horses and men at its disposal, was woeful at selling its own device (heck, even Microsoft has struggled) but at least they and MSFT have OS level control. Facebook can't use Android or iOS if they want any form of control of their own walled garden for long.

Maybe they can do a deal with Nokia/Symbian or Microsoft, who both need some sort of lever into the "smart" smartphone market and will have to burn money in buying their way in anyhows - but that limits facebook to whoever uses those phones.

No, endgame is they will have to try and install a deeper software suite that uses the user's address book onto Other People's Phones, and will have to buy their way in (otherwise why would anyone do it?) but they will be unable to make it walled off for long - competition, consumer inclination, mobile telco self interest and regulation will probably all conspire against them.

But then the early 1990's were littered with abandoned walled gardens as well, and everyone today seems to have forgotten the past - or rather is seduced by the "it will work this time" cry of the new apostles.

Tuesday, September 14. 2010

Nokia's big problem is to stay relevant in the next 3 years, and as we noted in our recent analysis of their travails, a key thing this year is to have a device that keeps up with the pack. This week is Nokia Week and they have released a family of new devices. Will that do the job? I'v been reading the various releases as they have come out, and my (subjective) impression is that even many of their traditional fans are "damning with faint praise" - ie even they realise that these new releases aren't going to cut the mustard.

Overall the N8 is an impressive device. Two years ago, it would have blown everything else in the market away. Today’s competitive landscape is a different story. From a hardware perspective, the N8 can hold up against most of the today’s devices. The software is a different story and while this version of the platform makes great strides in usability and functionality, there’s still much Nokia needs to do to drive the software platform forward.

That is Nokia writ large I think. In my view thay have another 6 month dev cycle to get onto par with Android and iPhone up the overal Apps - to - Phone supply chain, or this will be their swansong.

Update - Nokia has apparently made the "ballsy" statement that they are "Sorry they are not Apple". I suspect all their investors are too

Friday, September 10. 2010

Dinosaur opts for new leader they are comfortable with rather than face the radical reform they need to survive - it's a corporate story we have all heard over and over again, and this time it's possibly Nokia -SAI

The standard criticism we hear about Nokia is that it's a company overrun with managers, where decisions are always made based on business sense and never made based on product vision.
And it seems like Nokia's board just hired another CEO who is a seasoned manager, but not a consumer product visionary. So unless Stephen Elop, Nokia's new boss, has hidden talents, he may represent more of the same for Nokia -- which would be a disaster.
Nokia needs someone who can leapfrog Apple's iPhone and Google's Android the way they leapfrogged Nokia. Is Elop that guy?
Let's trace through his career: Nothing exciting the last couple years as the Office boss at Microsoft, nothing that consumers would ever care about as COO of Juniper Networks, and then sales functions at Adobe and Macromedia.

Timing, as they say, is everything. Nokia is largely irrelevant in the emerging fast growing, high margin smartphone world. Criticisms range from unintuitive software to design-by-committee to just not being cool in the new mobile world.

They face the classic incumbent problem - how to maintain their hold on the existing legacy phone market while catching up in the new market which is culturally totally alien. By my calculation Mr Elop has about 2 years ( 3 if he is quick, now ). So, what to do, what to do?

Firstly, I have been working in and around corporate innovation and reinvention for 20 odd years, and in all that time the one thing I have seen that really works in this space is the out-of-the line skunkworks. If Nokia is to push it's way into the new smartphone market it will need to set up an independent operation far from it's madding crowd of existing stovepipes, probably somewhere steeped in the new mobile culture. Small acquisitions get stifled unless they are kept away from the Barons (think Dopplr) and big acquisitions don't work as the temptation to meddle is just too great. So - step one is a skunkworks, plus careful small acquisitions then later pull through into the channels.

Secondly, it is highly unlikely there is anyone in Nokia who can run this new operation credibly, they need to bring in some cool, and fast, to give them some believability that they can do something good later. That buys a bit of time before something has to hit the ground. In fact they probably need to bring in a lot of new people to effect a culture change in the skunk works

Thirdly, they have to release something as good as the current market leaders (by the lights of the early adopters, not their own fan base) in the next year to capture the still large Nokia customer base before they defect. Their advantages over the medium term time are scale, reach, industry clout and a massive user base - that is theirs to lose. But despite a lot of advice at the time they blew mobile music, then blew smartphone 1.0 and are in the process of blowing mobile tablets.

So, best of luck to Mr Elop. Let us hope he turns into an unsafe pair of hands.

Tuesday, June 29. 2010

The founder of Digital Playground, one of the porn heavyweights in the U.S., told ConceivablyTech that it will abandon Flash as soon as the desktop browsers fully support HTML 5. We also learned that 3D is just not there yet and that online movie streaming is unlikely to replace Blu-ray discs anytime soon.

The reason is that HTML 5 is making it redundant:

We have HTML 5, which is generally praised as the next major evolutionary step for HTML that automatically questions the future of Flash. Conceivably, Flash could co-exist next to HTML 5, but if we look at the possibilities that are provided by HTML 5, it is entirely possible that Flash will be obsolete in the not distant future.

And thus the Adult industry, a tech kingmaker in the past, is looking at the next thing - the iPhone! No flash on the iPhone + lots of iPhone usetrs + a wa of making money from content = HTML 5.

That will probably be the evolving story of all online video media going forward, at least until there is another way of making money from it.

Tuesday, April 13. 2010

There was shock and even awe today when Mary Meeker of Morgan Stanley said the Mobile Internet "will be huge":

The Morgan Stanley analyst says that the world is currently in the midst of the fifth major technology cycle of the past half a century. The previous four were the mainframe era of the 1950s and 60s, the mini-computer era of the 1970s and the desktop Internet era of the 80s. The current cycle is the era of the mobile Internet, she says — predicting that within the next five years “more users will connect to the Internet over mobile devices than desktop PCs.” As she puts it on one of the slides in the report: “Rapid Ramp of Mobile Internet Usage Will be a Boon to Consumers and Some Companies Will Likely Win Big (Potentially Very Big) While Many Will Wonder What Just Happened.”

"Some companies will do very well" - now that is a devastating insight.

Those whose memories go back to Ms Meeker in the DotCom era are absolutely stunned, stunned I say! by this walk on the wild side. Throughout that period she was the very model of the carefully considered forecaster, a paragon of predictive parsimony, a doyenne of discriminating, dispassionate data-driven delivery, an angel of ambivalent analysis

Tuesday, March 23. 2010

Speaking at a Mobile Marketing & Advertising event in Las Vegas to coincide with CTIA Wireless 2010, Diana Pouliot – director of mobile advertising at Google – revealed that one-third of all Google searches via the mobile web pertain to some aspect of the searcher’s local environment.

Not quite in the "whoddathunkit" bucket, but the interesting thing - to me - is the actual proportion. If I were making an hypothesis, I'd have thought it would be higher. This is all quite interesting, as to my mind only 1/3rd of searches being local militates against the hype-huged location based market. Interestingly, the article also notes that:

......some analysts now project that location-based mobile spending will top $4 billion in 2015. That’s a mind-blowing increase from the relatively paltry $34 million spent just last year.

The $4bn by 2015 estimate intrigues me, as just the other day estimates of $13bn by 2014 were being thrown around - we pooh poohed them at the time, and using our "half the amount estimated in double the time" rule for Planet Mobile we concluded the market would be more like $7bn by 2018* - which $4bn by 2015 is more-like than $13bn by 2014!.

The thing is, usually it takes 2 years for Planet Mobile to halve their heady early day forecasts. This has taken just 2 months. Clearly the Planet Mobile krew have already reacted to the new data. Planet Mobile meets Internet Time

I just hope somebody has told all the location based startups crowding onto the ground floor.......

Saturday, March 20. 2010

At first, I was using all of the services I had on my phone to check-in when I arrived at a place in Austin. This included: Foursquare, Gowalla, Loopt, Whrrl, Brightkite, Burbn, MyTown, CauseWorld, Hot Potato, Plancast, and (at certain places) Foodspotting. Even with great AT&T service, this would take a solid 10 minutes or more to check-in to all of them. And it took even longer when I’d have to pause to explain to my friends what the hell I was doing on my phone all that time.

This was at every venue we stopped at. The situation simply wasn’t tenable.

Indeed. And there are even more location based startups coming.....

I love that all these startups are emerging around location right now (at least a dozen more have emailed me just since I’ve been back from SXSW). But I’m starting to worry that this is going to turn into a repeat of the social wars, where we all have 15 different profiles we constantly have to update across a range of networks.

The outcome of the social wars are well known - concentration into just a few players. This will happen with location based services as well.

In fact I don't know why any startup after the 4th or so in a space bothers, the chance of success is miniscule and the chance of funding is minimal. Better by far to be contrarian and do something that the maddening crowd is not.

Wednesday, March 17. 2010

SAN FRANCISCO — A study released on Wednesday indicated that the market for mobile device software programs should rocket to 17.5 billion dollars (US) within three years.

Downloads of mobile applications to handsets will leap from slightly more than seven billion in 2009 to nearly 50 billion in 2012, according to the independent study commissioned by GetJar, the world's second largest app store.

Ah, another piece of cautiously optimistic research work from Planet Mobile

For the record, a rule of thumb we have found to be pretty reliable over 10 years of watching the mobile industry is to halve the prediction and double the time it takes. $25bn by 2014? I could live with that......

Wednesday, March 3. 2010

Matthew Ingram writing on GigaOm about the fascinating rise of the Book as the Killer App on the iPhone (see above chart):

According to Mobclix, which does mobile advertising for apps, the number of books in the iTunes store now exceeds the number of games for the first time since the device was launched, making books the largest category in the store. The numbers from Mobclix, which keeps a regular tally on the most popular apps and downloads, show that there are more than 26,000 books in iTunes, compared with a little over 24,000 games.

And just yesterday we wrote that the market for small, stand alone apps on the iPhone (and by extension other smartphones) was probably an early adopter fad. Prescient or what As Matthew notes, this is disruptive to an already Disrupted 1.0 industry

This fits in with something Om wrote recently based on data from Flurry, which also showed a substantial increase in the number of books being downloaded to the iPhone. At the time, Flurry said that Apple was “positioned to take market share from the Amazon Kindle” for book reading, despite the small size of the display, and that “with Apple working on a larger tablet form factor [Aka iPad], running on the iPhone OS, we believe Jeff Bezos and team will face significant competition.”

The Battle for the Book is thus looking very interesting, albeit it seems to be taking an initial backward step as various publishers and hardware providers try and jockey for proprietary supply models. This of course will be a hit with the customer like it has been every other time its been tried (not!)

So - some predictions in this space over the next few years:

(i) Greedy and shortsighted players will try and make proprietary content-to-device deals and attempt to lock in high prices of eBooks despite much lower production costs

(ii) This will be accompanied by the wails from the Book Industry that billions are being lost to e-Piracy (oh wait, that's started) and demand the Government Must Do Something

(iii) One player (my money is on Apple as the have form) will break the logjam allowing you to get most of the content on one (ie their) device

(iv) Les Autres will wail about unfair competition, but they have only themselves to blame - after all, the playout of the music industry is plain for all to see

(v) Authors still won't see more money for their work, so will start all teh alternative channels as musicians have.

Tuesday, March 2. 2010

There are a number of people whose blogs I always read, and when it comes to incisive comment on Planet Mobile one of those is Dean Bubley who writes Disruptive Wireless. I thought his recent piece on Mobile Apps was particularly useful when I read a story about an app on android selling $13,000 pm

Numbers

- About 70,000 downloads of the free version.
- 6,590 downloads of the paid version
- Price of the app was raised from $1.99 to $3.99
- The app steadily climbed the charts, briefly reaching a peak of #4 in the Travel category for paid apps.

Good luck to them, but putting one's business hat on I asked "is this a business model" - and then recalled Dean's post:

Wandering around Barcelona last week, I started feeling a deep unease at the current level of hysteria around mobile apps. It is was compounded this week by seeing a T-Mobile advert on the London Underground which didn't show a phone, but just said "Would you like a free phone with apps for just £20 a month?" [meaning "We'll sell you a cheap Android instead of an iPhone, but don't dare mention it or show it"]. Apple is bombarding the world with "apps, apps, apps" advertising as well.

That was what was on my mind too - as Dean says, this may not be sustainable:

But maybe it's just a fashion? After all, do you really want any form of ongoing "relationship" with a handset manufacturer? Will the mass market really want to keep adding new stuff to their device?

The first 100-200m owners of PCs bought and installed lots of applications. The most recent 100-200m have probably just got Office, a browser, Norton or some other security package, Skype and their favourite IM client. Apart from gamers, most people don't continually look for and download PC apps - although they're there occasionally if need strikes.

........

Most "cool new stuff" will be in the browser, just as it is with the PC. And maybe, just maybe after you've got used to it, you'll bother to find out if there's a 20%-better application. Once there are easy metaphors for multiple browser windows and tabs on mobile, and more ubiquitous support for multi-tasking, the idea of a "widget" becomes obsolete. They're just contrivances to get around small screen size, I think.

And the endgame?

The bottom line is that I'm wondering if the massed billions of phone users will really care about iPhone-style junk applications. Personalisation is all very well - but it's best done upfront, not on an ongoing basis. The hand of fashion could also start to dictate that people customise something else rather than phones.

A vision of 4 billion "modified" smartphones represents a dystopia of geekiness.

I must admit to having a lot of sympathy with this view, probably the kindest alternative view is to extrapolate the iPhone evolution, where an 80/20 (at best) is emerging - a small number of Apps are selling well (and these are the "$13,000 a month" stories), but a huge number are not.

Incidentally, in case you were wondering where the money really is, news today that the iPhone has a 60% gross margin.